Update: Interview with Betcha.com founder Nick Jenkins
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While the story has been buried recently due to all the goings-on with Bodog and Absolute, the arrest of Betcha founder Nick Jenkins is still one of the most important events of the year for the US online gaming industry. You can read our archived coverage of the case here.
Summary: Betcha.com was a service that allowed members to make wagers with each other. Betcha took a small fee from certain wagers but did not hold money or participate otherwise in wagering with members. The site first ran into resistance from lawmakers in its home state of Washington, and earlier this year warrants were issued for Jenkins and two Betcha employees by the State of Louisiana.
Nick was nice enough to take some time to answer our questions and update us on the status of his case:
Thanks for taking to time to chat with us, Nick. Could you give our readers a quick update on where your case stands at the moment?
NJ: As of October 8, 2007, two co-workers and I await possible extradition to Louisiana for alleged violations of Louisiana’s “gambling by computer” law. Acting in connection with the Washington State Gambling Commission (”WSGC”), a Louisiana state trooper accepted four bets on Betcha for a total of $35, for which we grossed seventy cents. That was the only action Betcha ever saw out of Louisiana. For that, we’ve already been to jail – me twice – and face felony charges in the Bayou state for which, if convicted, we face up to five years in prison. The matter is now on the desk of Washington Governor Christine Gregoire, who has the power to deny our extradition. If she approves it, we will be the first persons ever extradited to Louisiana for alleged violating its gambling by computer law. (Last year, then-New York Governor George Pataki refused to extradite a UK-based executive to Louisiana on the same charges we now face.)
With respect to our situation in Washington, we filed a declaratory judgment action after the WSGC ordered us shut down. 32 minutes after we filed our lawsuit, the Louisiana trooper started betting. The next day the WSGC obtained a search warrant to seize all of our equipment and business records, which it did two days later. It is now trying to sell the equipment, all while our declaratory judgment action is pending. Our original hearing date on the merits was scheduled for September 21. It was postponed after the WSGC’s lawyers told the judge that, ten weeks after it initially ordered us to shut down, it needed more time to consider Betcha.com in light of the state’s gambling laws.
You had some blog entries that detailed the blow-by-blow progress of the case. Those entries have since been removed. What was the reason behind their removal, and do you have any plans for retelling this story to a broader audience once some kind of resolution is reached?
NJ: The blog entries are back up. I republished them because I didn’t feel right about not telling the world about the travesty perpetuated by law enforcement against U.S. citizens who have done everything possible to comply with the law. It is no stretch to say that Washington bureaucrats have denied us our civil rights and Louisiana’s are engaged in a high-tech shakedown. Hopefully the story will prompt Washington legislators to call for an investigation of this matter specifically and the WSGC’s tactics generally, which I am told have become increasingly hostile to Washington citizens in the last few years.
I originally removed the blog entries because the government was using them against me. In one case, a Washington prosecutor argued that a blog entry I made about a future hypothetical trip to Oregon was evidence that I intended to flee Washington. The judge bought it and sent me to jail. http://www.betcha.com/Blogs/article/Washington_Justice_Write_a_Blog_Go_To_Jail. I am now free on $50,000 bail. (Ironically, the same prosecutor swore in oath and in writing that my colleagues and I fled Louisiana on or about July 23, 2007, after the arrest warrants were issued. Neither of my colleagues have ever been to Louisiana. I haven’t been there since 1994.) I have also been told that the motivating factor behind Louisiana wanting us has more to do with my blog content than with any alleged gambling activity.
I do not have plans to tell the story to a wider audience once this is settled. Hopefully I will be focused on building a business.
Do you believe the Betcha situation has had any kind of ‘chilling’ effect on US businesses who may have been considering similar operational models?
NJ: How could it not? The U.S. generally and Washington and Louisiana specifically have the reputation of having an irrational hostility toward online gambling – even, as in Betcha’s case, when there’s no gambling involved. Betcha’s story demonstrates that their hostility isn’t just irrational – it’s maniacal. Perhaps as bad is that Louisiana is exporting its online gambling law to web developers sitting anywhere in the world. In effect, Louisiana has anointed itself the world government of online gambling.
In retrospect, is there anything you believe your company could have done differently that would have allowed you to avoid prosecution?
NJ: I did everything a law-abiding citizen could do to make sure Betcha.com complied with the law. As a former lawyer, I spent hundreds (if not thousands) of hours researching the legality of Betcha under federal law and the law of every state in the union. I consulted with leading authorities in the industry. And I left features out of the site that would have made it a better product because they would have been illegal.
In hindsight, I should have spent less time researching the law and more time researching which states had the most aggressive bureaucrats. I believed in the ol’ mantra that America is a nation of laws not of men. Not a good idea. Had I done that research, I might have appreciated the zeal with which bureaucrats protect their turf, particularly in Washington, where the WSGC: worked with another state to get Betcha.com; may have retaliated against Betcha for our filing of the declaratory relief action; misled a state judge the following day by failing to disclose to her that we had sued it just hours earlier in order to get a search warrant; seized our computer equipment, then initiated a forfeiture action against it, while our action was pending; told my wife that a judge’s ruling on the merits “doesn’t matter” because they’ve already determined we’re guilty; then, three months later, decided it needed more time to fully understand how Betcha.com actually works.
(For the record, almost three months after having our equipment and business records seized, no prosecutor in Washington has pursued charges against us. Louisiana has not yet filed felony charges for the trooper’s seventy cents in bets, but I suspect they may do so soon.)
